City Council Finance Committee Meeting

FINANCE COMMITTEE MINUTES May 17, 2018 The City Council Finance Committee of the City of Norman, Cleveland County, State of Oklahoma, met at 8:30 am in the Municipal Building Executive Conference Room on the 17th day of May, 2018, and notice and agenda of the meeting were posted in the Municipal Building at 201 West Gray and the Norman Public Library at 225 North Webster 24 hours prior to the beginning of the meeting. PRESENT: Chair Castleberry, Members Allison and Wilson ABSENT: Member Bierman OTHERS PRESENT: Mayor Lynne Miller Steve Lewis, City Manager Anthony Francisco, Director of Finance Suzanne Krohmer, Budget Manager Jeff Bryant, City Attorney Jud Foster, Director of Parks and Recreation Roger Gallagher, citizen Evan Dunn, citizen Item 1, being: SUBMISSION OF THE REVENUE/EXPENDITURE REPORTS Anthony Francisco gave the report. In response to questions related to Norman Forward sales tax reports, he stated that the major expenditures for Norman Forward were for the Central Library, which is currently spending about $1 million per month, the East Branch, which is almost completed, and the Westwood Aquatic Center, which is also almost complete. When the Westwood Aquatic project is completed, we think there will be about $300,000 left in the project fund. The Oversight Committee has discussed putting this money back into the fund balance. Member Allison asked about the expenditure for the Westwood Tennis project. Francisco stated that the large expenditure was for the outdoor portion of the project, which has already been completed. Mayor Miller asked if the remaining money from the East Branch Library project could be used to put items from the original plan back into the project. Francisco stated that Council could add those items back into the project. The Council can approve change orders. Finance Committee Minutes May 17, 2018 Page 2 City Manager Lewis stated that if you add items back in, you will be asked to do it for other projects that had to cut items. Member Wilson asked if we could re-evaluate the budget and the add-ins in five years. City Manager Lewis stated that staff thinks we should save as much money as possible until we complete the major projects. Chair Castleberry asked about the budget for Public Art. Francisco stated that we had projected $1.7 million for Public Art projects, but if we come in at $1.5 million for example, then we do not have to spend the additional $200,000 on art. That remaining money can be reallocated as long as 1% of the construction budgets for the major projects are dedicated to art. Francisco stated that the sales tax is 2.5% below the fiscal year projections. We have discussed ways for staff to make cuts to stay within budget. Chair Castleberry asked about the expenditures for the General Fund. Francisco stated that this was one of the ways for staff to stay within budget. We have managed some expenditure for the fiscal year. Chair Castleberry asked how much of the $8 million under budget for expenditures are due to timing differences. Francisco stated that there are some seasonal expenditures that usually happen later in the fiscal year. We do expect to come in under budget, but not actually by that much. We project about $800,000 under budget on expenditures, but revenue will be under projections about $1 million. Mayor Miller asked about the shortfall in the 2017-2018 Sewer Excise Tax. Francisco stated that this tax is driven by the building industry, which is still very slow. Chair Castleberry stated that most of the utility funds look healthy. City Manager Lewis stated that some of the bids we received back on the landfill and the recycling contract are very competitive. This is good considering we are going to have to consider a rate increase for sanitation in the next couple of years. Mayor Miller stated that people have suggested doing some A frames in East Norman. These are portable recycling containers that can be more self-contained. City Manager Lewis stated this was the first that he had heard of this suggestion, and the proposals had already been sent out for bid. We will have to go back and see if this can be included. Mayor Miller stated that this type of container could be great at Little Axe School. Chair Castleberry asked if we could have a small end-of-the-year cleanup when school ends. Francisco stated that the cost of a cleanup is $300,000 city-wide. Mayor Miller stated that we could just do the core area. City Manager Lewis stated that we might end up with a “fugitive waste” problem. Member Wilson stated that we could make the spring cleanup event later to coincide with the school ending and students leaving. Chair Castleberry asked about the tax comparison report. We are the only city, other than Lawton, where the sales tax collection is down. Member Wilson stated that both Norman and Lawton have transient populations. Mayor Miller stated that more people buy online here due to Finance Committee Minutes May 17, 2018 Page 3 the large population of students. She also stated that Edmond and OKC sales are larger than ours. City Manager Lewis stated that OKC hires economists to do sales tax forecasts and presents those to their City Council. Chair Castleberry stated that we need more detail and a strategic financial plan like we have with water. We could do it internally or hire it out. Mayor Miller asked what a strategic budget plan would cost. Francisco stated that we can find out how much it would cost from OKC. Mayor Miller stated that we are tied to sales tax, tied to voting, personnel costs, and efforts to manage healthcare. We have a problem with escalating personnel costs. Is there anything we haven’t thought of? Francisco stated that is really comes down to a lack of time and employees. Mayor Miller stated that she doesn’t expect it to be done internally, but we could hire outside. It would be very helpful for Council to have a plan to address our budget issues. Francisco stated that OKC uses the ICMA Financial Trend Monitoring System. They provide per capita series of measures such as cost of oil, etc. Chair Castleberry asked if this was a database that we can subscribe to. Francisco stated that we can subscribe to the database, but we would have to have staff to run it. Member Wilson asked about the cost of this software. Francisco stated it would be in at least five figures. City Manager Lewis stated that we can bring back examples and find out the cost of the software. Chair Castleberry asked about the new ERP system. Francisco stated the new system will provide an easier way to transmit data to usable reports. City Manager Lewis asked if we were aware of any other systems available. Francisco stated that Forest Park, OH developed one internally. Chair Castleberry stated that we make this a long term goal for the Committee. Mayor Miller stated that the budget is so tight which makes all of this so much harder. Due to this, we are hesitant to invest in extra things we need that could end up saving us money, such as a Fleet Management Study. Items submitted for the record: 1. Summary of Major Fund Revenue Sources vs. Budget FYE 2018 as of April 30, 2018 2. Summary of Major Fund Expenditures vs. Budget FYE 2018 as of April 30, 2018 3. Appropriations from Fund Balance FY18 4. General Fund Transfers over $50,000 between Expenditure Categories FYE 18 April 2018 5. Norman Forward Sales Tax Financial Reports ****** Item 2, being: SUBMISSION OF THE REPORT ON OPEN POSITIONS Finance Committee Minutes May 17, 2018 Page 4 Member Allison asked if the positions on hold are on hold to save money. City Manager Lewis stated that we are just moving slowly to approve positions. He also stated that we are in the process of getting together a fire academy. Items submitted for the record: 1. City of Norman Position Vacancy Report dated 5/2/18 ****** Item 3, being: MISCELLANEOUS COMMENTS Member Allison asked about the parking lot at Legacy Park discussion during the University North Park TIF Oversight Committee meeting. Francisco stated their recommendation was a parking lot at Legacy Park with 35 spaces just south of the flag pole. Foster stated that it would be north of the flag pole and west of the restroom building. Member Allison asked if the money is available for this parking lot. Francisco stated that the money is available in the project. City Manager Lewis stated that the Council at the time thought the original plan had too much parking space. Chair Castleberry stated that we could make an impervious parking lot. Francisco stated that the TIF #2 Committee wants bids for pervious and impervious parking lots and that recommendation will be going to Council. Chair Castleberry stated that we really need to extend Legacy Trail. We should look at this again due to more building going on in the area. Member Allison asked if it would have to be bid out or if we already have a standing contract. Jud Foster stated that it would not necessarily be a public bid project so it could go faster. ****** The meeting adjourned at 9:30 am. ATTEST: City Clerk Mayor